No extra IT contractor hiring in January 2024, despite employers turning to temps over uncertainty

Demand for IT skills on a temporary basis firmed up in January 2024 ever so slightly from its December 2023 low, REC figures show.

IT contractors will welcome the New Year offering its usual round of fresh opportunities, but their own demand is still in the red.

In fact, the Recruitment & Employment Confederation scores tech freelancer demand at 46.2, on a scale where 50.0 equates to growth.


While that compares favourably to December (45.5), the REC’s Neil Carberry said IT was one of the “weakest” labour markets in January.

Like construction and retail, technology ‘relies on consumer/business confidence to buy/invest,’ he said, implying such confidence is low.

The REC’s chief executive, Mr Carberry did point to two, if not three potential fillips for IT contractors who haven’t seen any New Year bounce in their own individual prospects.

'Employers using more temp workers to deal with uncertainty'

First, appearing to explain 9-to-5 vacancies falling “flat” despite ‘demand still being there,’ firms are “using more temp [workers] to deal with uncertainty.”  

Second, he said the “more robustly” operating contractor market saw growth in two regions -- the North and the South (excluding London).

That might inform IT contractors’ job search now, but Mr Carberry’s third potential fillip is something that won’t come before March 6th.


“[Our] resilient labour market is in a stand-off with a weaker economy. That will hold for a bit -- but can't last forever.

“Britain needs to grow to generate jobs and opportunities, pay people well and fund public services,” he said.

Jon Holt, chief executive of KPMG added to the clear messages to chancellor Jeremy Hunt ahead of next month’s Spring Budget 2024.

“We know the UK’s ambition is for technology to drive productivity and economic growth, and yet we still face a shortfall in skilled tech talent.

“If the UK is serious about equipping the workforce for a modern digital economy,” Holt said, “we need government and business working together and investing in reskilling and upskilling.

'14 technology skills in short supply'

In the IT sector, skills shortages in January 2024 were pronounced according to the REC.

The confederation’s member agencies hiring for full-time positions reported 14 technology candidates “in short supply”.

They included; Front-End Developers, IT Directors, IT System Administrators, ML Engineers, Senior IT Engineers, Software Architects, Software Engineers and UX Developers.

'Tech contractor pool has narrowed by 12%'

The remaining six skills shortages for permanent tech jobs were; Digital, IT, Service Desk, Software Sales, Technical and Technology.

Last month also saw a scarcity of freelance IT contractors for Automation Testing; Cyber Security, Data Engineering, Development, Software Engineering, Senior IT Engineering, Technical and Technology assignments.

Tech staffing agency VIQU (which today drills down deeper into IT contractor demand, exclusively for ContractorUK), says its pool of working IT contractors annually narrowed in January 2024 by 12%.

'Software development job-clicks up by 252%'

But according to, some specific roles received a “substantial improvement in job-seeker interest” even if new opportunities, overall, in January 2024 only grew by a miniscule 0.2%.

The job site’s economist Jack Kennedy reflected: “Though, in several cases including tech, this reflects a sharp decline in job postings, leaving more jobseekers chasing each available position.

“Clicks on software development roles are up 252% on average since February 2020, relative to the average job.”

'Hiring challenges'

Kennedy did not identify Budget 2024 as a chance for government to intervene, though his comments suggest employers, if not candidates, wouldn’t object if it did.

“Hiring challenges have eased but haven’t completely disappeared, with many industries needing to fill roles but not always receiving sufficient job-seeker interest.

“Remaining competitive on pay, benefits and flexibility continues to be important to attracting and retaining talent,” Kennedy said.

'Green skills and AI'

Leaving Mr Hunt in no doubt that the onus is on his shoulders, the REC’s Mr Carberry said:

“The chancellor has the perfect opportunity in the Spring Budget to give some clear signals”.

As to where, Carberry specified: “We can get the wheels of investment turning by recognising that the people stuff matters as much as capital expenditure. Investment in new industries and technologies such as green skills and AI is great and necessary, but we must get more of firms thinking about how they organise work, and how to build new skills to fuel local economies across the UK.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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